Thursday 19 May 2011 14.26 EDT
First published on Thursday 19 May 2011 14.26 EDT

It's hard to miss the new headquarters of the Muslim Brotherhood in the Cairo neighbourhood of Moqattam – six stories towering over the dusty street with the distinctive Qur'an and crossed swords symbol emblazoned on the stucco facade. The decor is a medley of parquet floors, crystal chandeliers, swagged velvet curtains and gilded furniture.

In the lobby a team from the brotherhood's fledgling TV station is interviewing a bigwig as a sharp-suited, clean-shaven aide hovers fussily.

"After 100 days we are sure the revolution is on the right track," beams Issam el-Erian, the articulate and experienced spokesman for the organisation known in Arabic simply as the Ikhwan. "In a few months we will have a new parliament and then a new constitution for the new Egypt."

The Moqattam HQ is a striking improvement on the brotherhood's shabby old premises in a downmarket Nile-side suburb – a reminder of the long years when it was banned, its activists routinely harrassed, detained and tried in military courts and aspiring MPs forced to stand as independents.

Now, everything exudes self-confidence and a sense that the world's oldest Islamist movement, which has long embraced democracy and eschewed the violence of the past, is poised to prosper in the post-Mubarak era. It is even planning to set up football teams to compete in the country's professional leagues, prompting silly jokes about yellow cards for any pulling of beards.

Erian and two other senior figures have resigned from the leadership to found the Freedom and Justice party (FJP) to compete in September's elections – Egypt's first free vote since the 1952 revolution. The new party and the 83-year-old Muslim Brotherhood have "the same mission and goals, but different roles", he explains.

Predictions range from the FJP becoming the dominant force in the new parliament to capturing around 20% of the seats because, the argument goes, in a multi-party democracy its old anti-regime appeal will be weakened.

The brotherhood did not organise the Tahrir Square protests, but backed them when the regime was teetering. It is careful now to avoid appearing too ambitious or threatening. It says the FJP will field candidates for up to 50% of parliament and, crucially, none for next year's presidential race (though an independent candidate, Abdel-Moneim Abul Fotouh, does come from a reformist brotherhood background). "It is not the time for decisions," Erian added. "This is the time to be united and move Egypt from dictatorship to democracy."

But Muntasser al-Zayyat, a prominent Islamist lawyer, believes the Ikhwan could end up controlling as much as 60% of parliament – because their secular and liberal rivals are divided and far less experienced than ex-members of Mubarak's now disbanded National Democratic party, who are likely to stand as independents in their old constituencies.

Opponents say they expect a poor showing because of the brotherhood's internal divisions and a wide generation gap, arguing too that the old regime and foreign governments both exaggerated its coherence, importance and the danger that it could to lead to an Iranian-style Islamic state on the Nile. Its assiduous grassroots work – providing social services, clinics and schools to fill the gaps left by a profoundly rickety state – is considered far more important than any overtly political activity.

"I would not like the brotherhood to come to power but it is good that they have entered the political arena," said Mona Makram-Ebeid, a former MP for the liberal Wafd party. "It was ridiculous to call them 'the banned' when they won 88 seats in the 2005 elections. That gave them a mystique. Once you incorporate them you demystify them."

Shrugging off suggestions of wishful thinking, Hani Shukrullah, the veteran al-Ahram journalist, agrees: "The brotherhood will not be the same any more. The ideal environment for them was authoritarianism but in a pluralistic political space it will be a struggle of programmes and agendas, not of ideology or religion."

Yet Egyptian liberals, leftists and Christians may face a far bigger problem than the Ikhwan with the resurgence of fundamentalist Salafis – "Egypt's Taliban," one intellectual bluntly calls them. The group, which follows a literal interpretation of the Qur'an, were repressed under Mubarak and were linked ideologically to violent groups such as the (now reformed) Gama'a Islamiya (Islamic Group).

Abboud al-Zumar, who served a 30-year prison sentence for his role in the assassination of President Anwar Sadat in 1981, is one of several Salafis who have been released from detention in recent weeks. He was in jail with Ayman al-Zawahiri, Osama bin Laden's Egyptian deputy. Hundreds more are reported to have been quietly allowed to return to Egypt from abroad.

In addition, liberals claim, the army has sought the help of leading Salafis, such as Sheikh Muhammad Hassan, to preach coexistence and reconciliation after sectarian violence instead of confronting them. In April, Salafis were blamed for blocking railway lines in protest at the appointment of a Christian governor in the Upper Egypt province of Qena. It took last week's incident in the working-class Cairo suburb of Imbaba, in which 12 people were killed after an attack on a Coptic church, to trigger a harsh response.

Islamists complain they are being deliberately demonised. "The Salafis have become a scarecrow," argued Zayyat. "It used to be the brotherhood. Now the secularists are using the Salafis to attack the Ikhwan." The brotherhood, in turn, accuses its enemies of smearing them by conflating them with the Salafis. "Those who fear us do not know us," said Ali Abdel-Fatah, a brotherhood leader from Alexandria, Egypt's second city. "And some journalists try to confuse us with stricter religious groups."

Salafis insist their priority remains Da'awa (preaching), aided by popular preachers, TV shows and websites funded by Saudi Arabia, home to the related Wahhabi doctrine of Islam. Until recently, Egyptian Salafis were more a school of thought than an organisation — "ignorant people who know nothing of the wider world," complains a fierce secular critic, Midhat al-Khafagy. But they are adjusting to the limelight and abandoning their traditional quietism for active politics. March's constitutional referendum was hailed by them as a "victory for religion". Now there are plans to form two brand new parties – Fadila and Nur (Virtue and Light) – for September's parliamentary elections.

"The old regime put a lot of pressure on us to stop our ideas spreading but now people can see how many Salafis there are," said a delighted Sheikh Abdel-Moneim al-Shahat, a leading Salafi spokesman from Alexandria, who has warned that a liberal constitution for the post-Mubarak era would be a "catastrophe" for Egypt.

"We want a democratic constitution but it should be in line with sharia law. We won't accept a Christian or a woman as president. The liberals want a democratic constitution but some of it would be against sharia, especially on issues of personal morality."

In a rapidly changing political landscape, none of this looks like becoming the Islamist takeover feared by secularists. But it seems clear the role of Islam in Egyptian public life is going to be bigger, in what Erian has called the "transition from pharaonic rule to people's rule."

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